“It is amazing how you will have bankers who love your product; love your service, but won’t loan you any money,â€ Clark told an audience during a breakfast conversation titled ‘Investing in the Success of African American-owned Businesses,’ hosted by JPMorgan Chase, VEDC, and Black Enterprise.
When he was ready to launch Uncle Darrow’s he went to someone with whom he had formed a professional relationship with over the years, and who was able to help him get the financing he needed. “I can’t stress enough the value of having relationships,â€ Clark says. “I don’t expect everybody to embrace my vision. You have to go out and seek the people who want to help you, that may mean going through 75 to 100 people.â€Â Find someone, a mentor who can shepherd you along the way, he adds.
Access to capital, particularly to loans between $50,000 and $350,000, presents a major obstacle to growth. “We learned that African American owned small businesses are truly small, averaging $90,000 to $100,000 a year in sales,â€ notes OC Isaac, VEDC’s vice president of national strategic initiatives. “To respond to that we have developed a fund (National African American Small Business Loan Fund) that is going Â [to] deploy capital in loan amounts in the size of $35,000 to $250,000, which allows us to address the smallest of African American small business to the largest of African American small businesses.â€
As he explains, many of these dedicated loan funds that have gone to market have done so as a microloan program, so under $50,000, or a small business loan vehicle that is $50,000 to $350,000. Â What’s more, Isaac says VEDC will provide a customized upfront technical assistance platform that is not based on a classroom setting but one-on-one mentoring, business advisory that focuses on the cash flow management of an individual entrepreneur. The National African American Small Business Loan Fund also features affordable loan terms, including no collateral required for loans under $50,000 and a 48-hour to one week turnaround.